Correlation Between Amazon and Amundi Physical
Can any of the company-specific risk be diversified away by investing in both Amazon and Amundi Physical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Amazon and Amundi Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Amundi Physical Gold, you can compare the effects of market volatilities on Amazon and Amundi Physical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Amazon with a short position of Amundi Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Amundi Physical.
Diversification Opportunities for Amazon and Amundi Physical
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Amazon and Amundi is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Amundi Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Physical Gold and Amazon is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Amazon Inc are associated (or correlated) with Amundi Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Physical Gold has no effect on the direction of Amazon i.e., Amazon and Amundi Physical go up and down completely randomly.
Pair Corralation between Amazon and Amundi Physical
Given the investment horizon of 90 days Amazon Inc is expected to generate 1.6 times more return on investment than Amundi Physical. However, Amazon is 1.6 times more volatile than Amundi Physical Gold. It trades about 0.19 of its potential returns per unit of risk. Amundi Physical Gold is currently generating about -0.13 per unit of risk. If you would invest 19,578 in Amazon Inc on September 4, 2024 and sell it today you would earn a total of 1,493 from holding Amazon Inc or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amazon Inc vs. Amundi Physical Gold
Performance |
| Timeline |
| Amazon Inc |
| Amundi Physical Gold |
Amazon and Amundi Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Amundi Physical
The main advantage of trading using opposite Amazon and Amundi Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Amundi Physical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Amundi Physical will offset losses from the drop in Amundi Physical's long position.The idea behind Amazon Inc and Amundi Physical Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Amundi Physical vs. Vanguard SP 500 | Amundi Physical vs. SPDR Dow Jones | Amundi Physical vs. iShares Core MSCI | Amundi Physical vs. iShares SP 500 |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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